ORBK Orbotech Ltd. - Ordinary Shares

ORBOTECH LTD. (NASDAQ/NM SYMBOL: ORBK) today announced its consolidated financial results for the first quarter ended March 31, 2007. Revenues for the first quarter of 2007 totaled $86.1 million, compared to the $101.4 million recorded in the first quarter a year ago. Net income for the first quarter of 2007 was $5.6 million, or $0.17 per share (diluted), compared with net income for the first quarter of 2006 of $14.1 million, or $0.43 per share (diluted). Sales of equipment to the printed circuit board (�PCB�) industry relating to bare PCBs were $35.5 million in the first quarter of 2007, compared to $40.8 million in the fourth quarter, and $41.0 million in the first quarter, of 2006. Sales of flat panel display (�FPD�) inspection equipment were $19.1 million, compared to $27.8 million in the fourth quarter, and $30.0 million in the first quarter, of last year. Sales of equipment to the PCB industry relating to assembled PCBs were $6.8 million, compared to $8.5 million in the fourth quarter, and $9.2 million in the first quarter, of last year. Sales of automatic check reading products were $2.4 million, compared to $3.2 million in the fourth quarter, and $2.3 million in the first quarter, of 2006. In addition, service revenue for the first quarter of 2007 was $22.2 million compared to $22.9 million in the fourth quarter of 2006, and $18.9 million in the first quarter of that year. The Company completed the quarter with cash, cash equivalents and marketable securities of approximately $236 million, compared with approximately $270 million at the end of 2006. Non-operating disbursements totaled approximately $19.0 million, comprised mainly of $16.5 million for the repurchase of ordinary shares of the Company pursuant to the Company�s buy-back program under which up to an additional approximately 620,000 shares may be purchased, and $2.5 million in capital expenditures. The weakening U.S. Dollar resulted in a reduction in net income of approximately two cents per share compared with the fourth quarter of 2006; and, if the Sheqel-Dollar exchange rate remains at current levels, can be expected to result in an additional reduction in net income of approximately three cents per share in the second quarter. While overall revenues from the Company�s PCB business experienced a temporary decline this quarter, the Company continues to benefit from high levels of demand for its Paragon direct imaging system, and recognized revenue from a record number of systems this quarter. The sustained success over the long term of the Company�s Discovery PCB-AOI system has continued to reinforce Orbotech�s leadership position in the PCB industry. The decrease in revenues from sales of FPD products was the result of a significant reduction in the level of capital investment by LCD manufacturers, a trend which is expected to continue throughout 2007. However, based on the continuing, very strong demand for LCD televisions, the Company believes that capital expenditures by LCD manufacturers should pick up towards the end of 2007 and in 2008. Commenting on the results, Rani Cohen, Chief Executive Officer, said: �As we expected, our first quarter operating results mark the beginning of a challenging year. Nevertheless, we remain optimistic as to the long-term demand for our principal products, and confident that our ongoing emphasis on research and development, together with our strong balance sheet, continue to lay a sound foundation for future growth.� An earnings conference call is scheduled for Monday, May 7, 2007, at 9:00 a.m. EDT. The dial-in number for the conference call is 210-234-0001, and a replay will be available on telephone number 402-998-1330 until May 21, 2007. The pass code is Q1. A live web cast of the conference call and a replay can also be heard by accessing the investor relations section on the Company�s website at www.orbotech.com. About Orbotech Ltd. Orbotech is a world leader in providing yield-enhancing, production support solutions for specialized applications in the supply chain of the electronics industry, principally for printed circuit boards (PCBs) and flat panel displays (FPDs). The Company designs, develops, manufactures, markets and services automated optical inspection (AOI) systems for bare and assembled PCBs and for FPDs, and imaging solutions for PCB production. The Company�s innovative AOI, imaging and computer-aided manufacturing (CAM) technologies enable customers to achieve the increased yields and throughput essential to remaining at the forefront of electronics production. Through its subsidiary, Orbograph Ltd., the Company also develops and markets automatic check reading software to banks and other financial institutions. Of Orbotech�s employees, more than one quarter are scientists and engineers, who integrate their multi-disciplinary knowledge, talents and skills to develop and provide sophisticated solutions and technologies designed to meet customers� long-term needs. Orbotech maintains its headquarters and its primary research, development and manufacturing facilities in Israel, and more than 35 offices worldwide. The Company�s extensive network of marketing, sales and customer support teams throughout North America, Europe, the Pacific Rim, China and Japan deliver its knowledge and expertise directly to customers the world over. For more information visit www.orbotech.com. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties which could cause the actual results to differ materially from those projected, including industry trends, the timing and strength of product and service offerings, changes in business or pricing strategies, changes in the prevailing political and regulatory framework in which the relevant parties operate or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis and other risks detailed from time to time in the Company�s SEC reports. The Company assumes no obligation to update the information in this press release. ORBOTECH LTD. CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 2007 � March 31 December 31 2007� 2006� U. S. dollars in thousands Assets � CURRENT ASSETS: Cash and cash equivalents 162,331� 187,187� Marketable securities 36,404� 41,373� Accounts receivable: Trade 151,980� 142,444� Other 18,467� 21,572� Deferred income taxes 3,651� 3,369� Inventories 80,564� 78,349� Total current assets 453,397� 474,294� � INVESTMENTS AND NON-CURRENT ASSETS: Marketable securities 37,339� 41,100� Other long-term Investments 6,670� 7,106� Non-current trade receivables 652� 738� Severance pay fund 13,399� 15,617� Deferred income taxes 1,650� 1,684� � � 59,710� 66,245� � PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation and amortization 20,611� 20,124� � GOODWILL AND OTHER INTANGIBLE ASSETS, net of accumulated amortization 14,205� 14,350� � � 547,923� 575,013� � Liabilities and shareholders' equity � CURRENT LIABILITIES: Accounts payable and accruals: Trade 27,473� 33,448� Deferred income 19,102� 19,967� Other 30,255� 49,420� Total current liabilities 76,830� 102,835� � ACCRUED SEVERANCE PAY 27,414� 29,762� DEFERRED TAX LIABILITY 10,215� � Total liabilities 114,459� 132,597� � MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 956� 914� � SHAREHOLDERS' EQUITY: Share capital 1,685� 1,680� Additional paid-in capital 135,441� 132,578� Retained earnings 350,533� 345,859� Accumulated other comprehensive income 26� 7� 487,685� 480,124� Less treasury stock, at cost (55,177) (38,622) Total shareholders' equity 432,508� 441,502� � � 547,923� 575,013� ORBOTECH LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2007 12 months 3 months ended ended March 31 December 31 2007� 2006� 2006� U.S. dollars in thousands (except per share data) � REVENUES 86,105� 101,402� 416,469� � COST OF REVENUES 49,883� 55,623� 226,908� � � � GROSS PROFIT 36,222� 45,779� 189,561� � RESEARCH AND DEVELOPMENT COSTS - net 15,575� 13,993� 60,473� � SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 16,395� 16,569� 68,942� � AMORTIZATION OF OTHER INTANGIBLE ASSETS 145� 145� 580� � RESTRUCTURING CHARGES 3,332� � � � OPERATING INCOME 4,107� 15,072� 56,234� � FINANCIAL INCOME - net 2,691� 1,289� 7,404� � WRITE-DOWN OF LONG-TERM INVESTMENTS (205) � � � INCOME BEFORE TAXES ON INCOME 6,798� 16,361� 63,433� � TAXES ON INCOME 963� 2,054� 7,893� � � � INCOME FROM OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES AND JOINT VENTURE 5,835� 14,307� 55,540� � MINORITY INTEREST IN PROFITS OF CONSOLIDATED SUBSIDIARY (42) (50) (255) � SHARE IN LOSSES OF AN ASSOCIATED COMPANY (223) (140) (315) � � � NET INCOME 5,570� 14,117� 54,970� � � EARNINGS PER SHARE: BASIC $0.17� $0.43� $1.66� � DILUTED $0.17� $0.43� $1.65� � � WEIGHTED AVERAGE NUMBER OF SHARES (IN THOUSANDS) USED IN COMPUTATION OF EARNINGS PER SHARE: BASIC 33,171� 32,513� 33,105� � DILUTED 33,331� 33,016� 33,399�